Open collaboration leading to novel organizations
January 6, 2014
Open collaboration — which has brought the world Bitcoin, TEDx and Wikipedia — is likely to lead to new organizations that are not quite non-profits and not quite corporations, according to a paper by Sheen S. Levine of Columbia University and Michael J. Prietula of Emory University published in the journal Organization Science.
The authors define open collaboration as “any system of innovation or production that relies on goal-oriented yet loosely coordinated participants who interact to create a product (or service) of economic value, which they make available to contributors and non-contributors alike.”
Open collaboration emerged with open-source software less than two decades ago. Its underlying principles are now found in many other ventures. Some of them are Internet-based; others are offline, such as TEDx, medicine, and traditional scientific experimentation.
Key points in the paper:
- Open collaboration is likely to expand into new domains, displacing traditional organizations. They suggest that executives and civic leaders should take heed.
- Open collaborations perform well even in seemingly harsh environments, for example, when cooperators are members of a minority group, are “free riders” who tag along, where diversity is lacking, or when goods rival one another.
- Such ventures have been affecting traditional firms, with, for example, Wikipedia supplanting Encyclopedia Britannica as a major general research tool. But despite the impact, the operating principles of open collaboration were opaque. The new research explains how these new organizations operate, and where they are likely to succeed.
Abstract of Organization Science paper
The principles of open collaboration for innovation (and production), once distinctive to open source software, are now found in many other ventures. Some of these ventures are Internet based: for example, Wikipedia and online communities. Others are off-line: they are found in medicine, science, and everyday life. Such ventures have been affecting traditional firms and may represent a new organizational form. Despite the impact of such ventures, their operating principles and performance are not well understood. Here we define open collaboration (OC), the underlying set of principles, and propose that it is a robust engine for innovation and production. First, we review multiple OC ventures and identify four defining principles. In all instances, participants create goods and services of economic value, they exchange and reuse each other’s work, they labor purposefully with just loose coordination, and they permit anyone to contribute and consume. These principles distinguish OC from other organizational forms, such as firms or cooperatives. Next, we turn to performance. To understand the performance of OC, we develop a computational model, combining innovation theory with recent evidence on human cooperation. We identify and investigate three elements that affect performance: the cooperativeness of participants, the diversity of their needs, and the degree to which the goods are rival (subtractable). Through computational experiments, we find that OC performs well even in seemingly harsh environments: when cooperators are a minority, free riders are present, diversity is lacking, or goods are rival. We conclude that OC is viable and likely to expand into new domains. The findings also inform the discussion on new organizational forms, collaborative and communal.